Do corporate governance “actors”’ features affect banks’ value? – Evidence from Romania

Abstract

The objective of our paper is to provide a comprehensive overview of possible influences that the key players of corporate governance – board of directors, executive management, auditor and shareholders, might have on financial institutions’ path to success. We consider our goal important due to the increasing number of governance failures and corporate scandals affecting banking environment, which gave rise to the present financial crisis and made from corporate governance a subject of controversy.Unlike prior research studies which were focused on similar goals - to test possible influences of corporate governance on firms’ value, our paper provides a particular approach on a specific business field, the banking one that was little explored on this topic before. Moreover, our research provides a more comprehensive approach of corporate governance impact over banks’ road to success, considering not just performances reached, but also the strategies followed, ensuring by thus originality, which adds a plus value to our study.The paper proceeds as it follows. Firstly, we briefly review prior literature concerning possible relationships between main “actors” of corporate governance and firms’ value often expressed by their performance. We continue our study by developing particular hypotheses related to corporate governance influences over financial institution's efficiency in case of Romanian banking system. After explaining in detail the data collection method and empirical analysis design, we test our hypotheses using information from sampled banks’ websites. Finally, we provide our research findings and discuss their implications, closely related to previous studies focused on the same goal.